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Ontario Holiday Pay – Bill 148

By now everyone has heard about the changes in Bill 148 – increase in the Ontario minimum wage, vacation entitlement and two paid sick days. But did you know about the sweeping changes to the Statutory Holiday Pay calculation in Ontario? Bill 148 has made important changes to Ontario Holiday Pay

Under the old system, a full-time person would get paid a full day for a statutory holiday, someone working half days would get a half day of pay. Someone that only worked one day a week would receive 1/5 of a day’s pay. There was calculation formula which accounted for the employee’s average hours over the last 20 days.

Under Ontario’s new Ontario Holiday Pay formula, public holiday pay is calculated by dividing regular wages earned in the pay period before the public holiday by the number of days worked in that pay period.

Under the Bill 148, a full-time worker would still get a full day of pay for the public holiday and someone working half days would still get a half day. However, if the only shift a part time employee worked in the past two weeks was a single eight-hour day, that employee would still receive a full eight hours of pay for holiday pay under the new system.

In a nut shell, there is no difference in holiday pay between full time and part time employees under new holiday policy effective 1st Jan 2018. The part time employees who have worked for only one day during the pay period are now entitled to get holiday pay equal to that earned by full time employees.

For a business that employs mostly part time staff, we expect the changes in Ontario Holiday Pay to substantially increase salary costs.

Tips for working with the new system under Bill 148

Schedule timetables carefully, employers should concentrate their part-timers within the two weeks before the public holiday to avoid a full day payout. This can be done by reducing shifts for some and increasing shifts for others.
Switch to full time employees where feasible and economical. The average hours worked by week in Canada is 36.6 hours, well under the overtime threshold of 44 hours in Ontario.
Confirm that all employees actually qualify for the public holiday pay, the Employment Standard Act states that holiday pay needs to be paid “unless they: fail without reasonable cause to work all of their last regularly scheduled day of work before the public holiday or all of their first regularly scheduled day of work after the public holiday” or if they fail, without reasonable cause, to work their entire shift on the public holiday if they agreed to or were required to work that day.

Note: Most employees who fail to qualify for the public holiday entitlement are still entitled to be paid premium pay for every hour they work on the holiday.

Qualified employees can be full time, part time, permanent or on term contract. It does not matter how recently they were hired, or how many days they worked before the public holiday.

You may be interested in reading more of our articles aimed at helping small business such as our 10 Business Secrets I Wish Every Client Knew or our 2018 HST article. Contact us anytime!